In 2013 Rosario Terracciano closed 643 transactions, earning him the #1 position in the Chicago Association of REALTORS® and #4 in the United States (as reported by Wall Street Journal). More recently he has developed a tool, ClickInvest, to help investors locate the best single family home opportunities in Chicago. In our interview Rosario discussing the challenges he faced in building his business, why he believes most brokers don’t need teams, and why he’s happier today doing fewer transactions.
D.J. Paris 0:14
Hello and welcome to another episode of Keeping it real the only podcast made by Chicago real estate brokers for Chicago real estate brokers. My name is DJ Paris. I am your host through the show, and we are excited to continue in 2018 and provide these conversations with top producers for you to help you grow your business to learn from some of the best and brightest producers out there and they’re nice enough to talk to us. So always grateful for top producers who are willing to share their secrets on our show today is no exception. We have Rosario Tara Ciano in particular how he pivoted from a traditional brokerage to investment and I think you guys will find this really interesting because his story is so unusual and amazing, and also how you can continue to support our show a couple of ways. Number one, let us know if you have any brokers or know any brokers that you think would be a good fit. We typically interview top one percenters, but we’re also open to you know anyone else that’s doing some maybe up and coming rising stars or just somebody that’s doing something particularly interesting and unusual, that’s working, you know, definitely reach out, let us know who those brokers are, and we can reach out to them. Also, subscribe via iTunes or Google Play, or anywhere else podcasts are served up, just search for keeping it real. And listen to all of our episodes. You can also get emailed every time we have a new episode by visiting our website keeping it real pod.com and drop us a line let us know what you like what you don’t like and what you want to see more or less of in the future. And we also have a Facebook page where we are always posting our episodes and who we’re talking to and interviewing, which is also keeping it real pod. And lastly, tell a friend if you have any other brokers that you think could benefit from this information, please pass this podcast along. We greatly appreciate it. And one more thing if you are a vendor, somebody who works with real estate brokers and wants to wants to advertise on the show, drop us a line and we’ll let you know how that works. Okay, you’ve listened to enough of my rambling so onto our episode with Rosario Tariceanu.
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Today on the show we have Rosario Tara Ciano, who is the co founder and CEO of click invest.com. Rosario began his real estate career in 2003, when he left the finance industry and partnered with a local real estate broker specializing in distressed real estate. Now in his 15th year working exclusively in investment real estate Rosario is excited to share the click invest system he pioneered, Rosario has represented investors rehabbers, builders, banks and institutions in more than 2500 transactions valued at more than 300 million. This is really important and one I want to make sure I talk I stress is Rosario was the number one broker in Chicago for 2013 and ranked fourth nationally by The Wall Street Journal. He has built a career working with investors to stabilize distressed properties, and now brings that experience and expertise to his venture. So thank you for Sario for being on the show.
Rosario Terracciano 4:24
Thank you very much, man. I appreciate it.
D.J. Paris 4:27
We do too. So tell us about how you got started back in 2003. How did you get into real estate?
Rosario Terracciano 4:34
So in 2003, I was trading s&p futures and Nasdaq futures at the Chicago Mercantile Exchange. I wasn’t making any money, so I was clerking during the day to make ends meet was in a pretty dark place in my life at that at that point of time, and I actually came across a book called The Power of Positive Thinking. And
D.J. Paris 4:58
is that Norman Vincent? appeal. Norman Vincent Peale? Yeah, I have read that as well. Yeah, that,
Rosario Terracciano 5:05
that That book changed my life that led me led me to another book, what I call the the greatest book, the Bible. And I got out of a lot of a lot of my bad habits got my my mind clear, and decided to get out of the financial markets and jumped headfirst into real estate.
D.J. Paris 5:26
Awesome, well talk about that. What was it like when in 2003? When you got in? How did you get started?
Rosario Terracciano 5:32
So for the first time, in many, many years, I could think straight. And I read a book called another book, right? The Millionaire mentor, not sure if you’ve ever heard that. Russ Whitney was the name of the gentleman who wrote that book. And in that book, it said, you know, you’ve got a network, if you want to succeed in real estate, you’ve got to talk to the right people. Fortunately, enough for me, my cousin’s brother in law, was an REO broker. So I said, Hey, can you connect me to this guy? And he said, Look, he’s got no time for anybody. You know, you can try reaching out to him, but he’s not going to have time for you. And I blew that guy up for three weeks. Well, and let’s, let’s pause for a second. That guy is also getting called by probably every broker around who also wants that business. Right, everybody? Yep. Yeah. So I remember the first time I called him, he said, you know, yeah, that’s great. You know, your cousin’s my brother in law, but doesn’t mean anything. I don’t have time for you. And I said, Hey, can I come sit in your office, and he said, Sure, but I’m still not going to have any time for you. And I literally went there every day for three weeks. And then three weeks in, he had a drive out to a property in Naperville. And his office was down in Gold Coast, in the Gold Coast. And he said, once you hop in a car with me, we’ll drive out there. And then we’ll talk and we talked and hit it off at that point. So
D.J. Paris 6:56
Wow. And so so so what happened
Rosario Terracciano 7:00
after that, so I left the merch when I got my first deal under contract. So I was more of a bird dog or wholesaler at that point, I wasn’t, wasn’t a broker. But he taught me the investment side of real estate and said, Hey, there’s this whole market that existed that few know about, and I started going after fast track, I’m sorry, properties that were in Fast Track demo with the city of Chicago. So these are buildings that we’re gonna get torn down. So he taught me how to track down the the taxpayers who are who own those properties, and then contacted one of them, got it under contract wholesaled it out. And after that first deal, I left a mark and, and just dove in headfirst.
D.J. Paris 7:46
Yeah, and you built up in impressive business. I mean, you’re very humble person. But you did I think I read an article about you, then this goes back to I think 2014. But I think it’s referencing 2012 where you did almost 650 transactions that year. Yeah. 2013 2013. Wow. Was it just you did you have a team? Where was that all you?
Rosario Terracciano 8:12
I had a team a rather large team. So and if if the listeners get anything out of this, I think the biggest thing aside from you know, pushing on every day and having faith and even even those days where you feel like you’re getting kicked in the face and you’re not making any progress. It’s understanding margin. And how to make money. I mean, the the purpose of everything we’re doing, isn’t it just go out and buy nice stuff. Okay, like, yeah, that’s fun. But you want to build net worth, you want to you want to, you want to buy assets or build assets, and you want to look good on financial statement, you know, so I wasn’t mindful of those things. I was I just wanted to be number one. That was, that was my goal. back then. I want to be the top broker in the city and Florida and staffed up like crazy. And my margins at the end of the day were were nothing impressive.
D.J. Paris 9:11
Oh, gotcha. Sure, sure. So you weren’t you weren’t really running it so much as a business or at least your margins weren’t, weren’t as impressive as maybe the ultimate numbers to the average broker looking at what you were doing. Were
Rosario Terracciano 9:27
Correct. You know, I had guys when I got handed the award guys are like, Oh my gosh, you crushed it. And yeah, yeah, like sell 640 homes in a year. Impressive. Sure, but I rather sell 50 homes and operated at a super high margin, then sell 640 at a super low, more, super low margin. You know, because at the end of the day, I think that’s the facade of real estate or real estate brokerages. Build a team build a team build a team. Well, yes and no, you know, If you’re building a team, but your margin continually continually decreases every year, is the team worth it? You know, unless you’re really just turnkey, and you’re not working at all. But I know a few brokers that get to that point where it’s just on cruise control, you know, right.
D.J. Paris 10:19
Yeah, I think you’re right. I, you know, to speak to the margin. The margin concern that I talked to the many, many years ago, a person from a broker from Texas who was moving to Illinois, called in and he had been a broker in Texas for like, 15 years and, and he was interested in moving to Chicago, and he was getting his license here. And he was asking me about potentially joining our firm. But I said, just out of curiosity, what’s what’s like the number one lesson you learned in 15 years of doing real estate down in Texas and, and because he was a really fun person to talk to, and he’s like, the best lesson I learned. He’s like, it took me about 12 years to learn it. But he said selling a million dollar home is just as much work as selling $100,000. Home. Yes. I went oh, yeah, that speaks to margin right there. So yeah,
Rosario Terracciano 11:04
absolutely. And, and efficiency and systems. Sure. Hands down. I mean, we’re. So we’ve got a team of six people now. I mean, back in the day, it might peak. And mind you, I was so I was doing REO disposition. So I was selling Oreos for the banks. Sure. And I was also representing hedge funds on the acquisition side. So it was a perfect storm. Right, right. Institutional client on the sell side, institutional client on the buy side, high volume,
D.J. Paris 11:33
non emotional decisions, just make the numbers work.
Rosario Terracciano 11:35
Yeah, cold and calculated, you know, there was no repeat business. But we had an operation of almost 60 people. Wow, peak, between brokers, external staff field ops, we have virtual assistants, property management, transaction coordinators, closers, offer negotiators? Yeah, I mean, it was this massive operation. We, we had two people full time just submitting offers every day. Sure, of course, it was their job. Just write draft contracts and send them you know, so
D.J. Paris 12:11
I can’t imagine how many offers you must have submitted. To get to 642. It had to be
Rosario Terracciano 12:18
a lot. Yeah. So it was 150, depending on the week, 150 to 200 a week. Wow. Yeah. So well, north of 13 14,000. Authors.
D.J. Paris 12:31
It’s, you know, it’s funny, once in a while you I don’t hear it as much from brokers who are interested, maybe coming to work our firm, because that’s my day job is I talk to brokers and, and about our firm. But once in a while, you’ll hear a new broker, these more new brokers, people who just get their license, and they, they’re, you know, they’re like, how do you get involved in the reo business? I don’t know. A lot about it personally. Do you have any opinions about getting involved as a broker in Arios? This in 2017, or just 2018? Now? Is it a viable market? Is it a tough market? Do you have any particular opinions about that? I think
Rosario Terracciano 13:08
REO today is is probably the hardest market to break into. Sure. Real estate side. When I started in REO disposition, it was 2009. So I learned the game from 2003 to 2005. I then went off started buying rentals and investing in real estate from Oh 5208. And when the market turned, I got wiped out. So I launched resurrecting real estate in 2009. And the timing was right on for that because REO inventory went through the roof, right? Sure, sure. So back then there was a huge need for brokers to get an REO business because there was so much volume. And the banks were looking for guys that understood systems. And I was a systems guy. So sure, it was perfect. But right now, the inventory is at its lowest level in years and a decade. Right. So to break in now is very, very hard. And I would honestly, where to even start today. I mean, you’d have to go to conferences. And what’s crazy is I didn’t even go to any conferences for the first few years. But you there have to know somebody, you know, go work for an REO broker. There’s a lot of REO brokers out there now that are tired. So maybe go talk with an REO broker and say, Hey, teach me the business and I’ll take it over for a year or something, you know, go work for somebody. Because when, when there’s when the volume is so low, the asset managers games are really on point because there’s not a ton of assets for them to scrutinize. Yeah. And you might bust your butt to get in with with an asset manager and then after the first few deals or, like now you’re not that good, and then you’re fired. So it’s a tunnel. Work tunnel work to get in. And you better have liquidity and capital because takes a lot to do it.
D.J. Paris 15:07
Yeah, I imagine. Yeah, it might be that the salad days or the halcyon days or maybe maybe if past at least for for getting into REO as a broker, at least, you know, for the foreseeable future. But we were talking but prior to us going live here about, you know, treat you had mentioned that treating, you know, the the brokers business like an actual business you think is just so important. Can you talk a little bit about that, and how you how you did that maybe advice you have for brokers?
Rosario Terracciano 15:40
Yeah. So I, I made the mistake, and, and I have a feeling that a lot of the listeners make the same mistake that you get into real estate for freedom, because you don’t want to work for anybody else. You want to work for yourself. So we’re all very driven people, right? Sure. And most of us don’t like paperwork. And don’t like the plan. We just sort of just winging everything, right. But what happens is, so like what happened with me, I launched resurrecting real estate in February 2009. In our first year, we sold 150 homes. I, I never did REO brokerage. So we turned the lights on, made the right connections and then took off. I went from one employee to 12 employees within a few months, and then at our peak 60 employees. I was never, I’d never ran a team. Sure. You know, I didn’t understand personalities. And I didn’t do any disk, you know, assessments or disc profiles. And literally, you’d walk in and I’d find a way to connect, because that’s what I do I connect something where do you grow up? Where do you go to school? All the wrong questions. So where do you go to school? Who do you know? Oh, yeah, yeah, I know this person. Great. You’re hired. You know, it’s like, so stupid. So you win. There’s a great book out there called Good to Great by Jim Carr. Oh, sure. Yeah, classic, write people on the bus wrong people off the bus. But it’s not just about getting the right people on the bus, it’s getting the right people in the right seats. And I didn’t do that I just kept staffing up throwing people at problems, right. Where I should have invested in what I found out, you know, five years later, I should have been investing in technology and in my systems, rather than in personnel. And it may sound insensitive, but I was running a ship with 60 people on it that probably could have ran with 10. Wow. And the right systems in place. So you know, I think number one is, is getting help. I after all this happen? I’ll fast forward so you guys can understand the pain. So if that’s fine, if I can dive until Okay, so 2009 launched resurrecting real estate 150 homes, 2010 250 homes 2011 350 2012, broke 500 was like 501 and in 2013 640. So it just straight up, right? Like a rocket. And every it seemed like every other month, we’re hiring more and more and more people. Well, no business plan, no marketing plan. It was just sheer just grit. And let’s just bust our button. Let’s make this happen. And then just keep throwing people at it. Right? Well, 2014 comes around our biggest client on the acquisition side, their orders filled, they were an institutional client. They said Okay, we’re good. Thanks. No warning, just like, Thanks. We’re good. We bought everything we wanted. We’re done. Wow, my payroll was 130,000 a month. Okay. Just payroll. And then I had the disposition and the reo side. Well, at that point, I took my eye off of the reo because the acquisition side was so much easier. Sure. And so now I’m like, Oh, my gosh, I already started to creep out of reo. So now that volume is down and the revenue on that side is down. And now I can’t weather the storm. So when you’re dishing out 120 130k a month, if the revenue is not meeting it? Well, who’s got to ante up to me? So I’ve got to float this company and pray that we get another big client, you know, so I went through that whole transition laid off nearly Gosh, I don’t know. It was like 80% of the people over the next six months. It was a bloodbath. Sure, and very, very, very depressing time. And I sought counsel. So I went through a program at Goldman Sachs called 10,000 small businesses, and great program and if you’re, if you’re a business owner and you’re struggling, I will plug them all day long.
It’s a scholarship so I applied for it. You open everything up, you open your books up to them. And, and you go through this six month course at nights and weekends. And they helped me understand what it means to run a business. And what’s the end goal? You know, we always start, we just the typical broker, you go out, you start selling real estate. And then guess what, you start buying a house, you start buying cars, and then your your lifestyle continues to increase, right. But what happens the second, you have a rough year, or a rough few months, well, your lifestyle is not going to adjust your lifestyle is now you know, a 200k lifestyle or 300k lifestyle? Well, if you don’t sell as much that year now, what do you do? Right? Or now you want to bring on a team, but now you have to cover the cost of the team. So you just took a pay cut? Right? Right? So really sit down and build a business plan and understand what do you want? Do you want? What’s the end goal? Is it to build a book of business and sell it? Is it to build a team? And then sell it? Or is it to stay in real estate for the rest of your life, which is totally fine. But then at that point, get a couple really good assistants that just want to be assistance, right? And that’s okay, and build a good book of business. and off you go. But don’t just defer to building a team thinking that’s the solution, because it may not be, you know, right
D.J. Paris 21:30
now, and so yeah. And so talk about how you, you’ve pivoted into click invest and what click invest is and so how that business got built.
Rosario Terracciano 21:39
So when we were working for the institutional client, I mean, literally, we had analyst, like I mentioned earlier, transaction coordinators offer negotiators. So our analysts would have to identify these these single family rental deals that would fit the client’s parameters, right, and their net yields and everything we’d have their assumptions, we’d plug in addresses, we’d plug in rental amounts, ARV is everything. And we’d have to underwrite hundreds of properties a day to submit 30 to 40 offers a day. Sure, right. So I had this massive operation to do that, well, when the when the client stopped buying or their order was filled. And I’m like, Oh, my gosh, we learned so much. I mean, we’ve underwritten 10s of 1000s of properties. We’ve bought, you know, hundreds of properties for them. What am I going to do with all this knowledge now, and I at that point, this was early 2014. I said, Let’s build this system out, that can do what I had, you know, 2030 people doing on a daily basis. And let’s figure out how to do this with a handful of people. So click invest was born through that, through that trial, through that tribulation through that pain. And essentially what it is, what click invest does on a daily basis is takes every deal in the MLS and underwrites it within our system based on algorithms that we’ve created. So taking what I learned in the trading space, you know, 1213 years prior, we built a system out that acts as a giant filter. So whether a client’s looking for a buy and flip, or a buy and hold all in the single family room, our system will identify those opportunities amongst the 10s of 1000s of properties out there, and then drop them into a queue for our analysts to do a final underwriting and then send it to the client with all the comps all the analysis put together. So they can review they can review it in under a minute, click a button to submit the offer and get their off their offer accepted within minutes.
D.J. Paris 23:51
Gotcha. So you guys, you guys have basically just created models and you dial into the MLS and look for deals essentially. That’s, that’s awesome. So So is it a is it a subscription service? How does how does someone get get access to that information?
Rosario Terracciano 24:11
Yep, so our clients pay a monthly so all of our clients or investors they they pay a monthly fee of 295 a month and then we are their broker on all their purchases through the platform. So if they have outside sources or outside brokers are working with we’re not exclusive so they’re free to work with any broker outside of click invest sure for their own deals or for any deals that are brought to them outside of click invest but if it’s a deal that they click Submit offer on within our system, we’re representing them
D.J. Paris 24:43
make sense? That’s That’s great. And then and you guys set up the you deal on the financing side as well or or No,
Rosario Terracciano 24:49
we’ve got we’ve got referral partners but I wouldn’t even say referral partners it’s more strategic because we don’t we don’t make any money on the referrals. But yeah, we’ve got lender as contractors, attorneys, insurance agents, so we’re really the hub. So a client will come to us, for example, one of our clients did 25 flips last year, this year over 50 flips. So we’ve helped him double his business, right? So what we do is a client will come to us and say, hey, I want to grow my business. Here’s where I’m lacking. You know, I need more contractors, or I need cheaper money, or I need this or I need that. And that’s where we come into play.
D.J. Paris 25:28
Yeah, that makes perfect sense. So essentially, what you what used to take dozens of people to do by hand you guys have systematized which is which is really smart. I know. Do you is it all residential? Is there commercial as well or
Rosario Terracciano 25:43
only single family? So residential, single family, that’s, that’s our bread and butter. That’s all we focus on.
D.J. Paris 25:50
And how long has click investment in been been out live?
Rosario Terracciano 25:54
So live ads, click invest May of this year. And then in October of this year, we rolled resurrecting underneath or we merged, resurrecting with click invest. So now it’s it’s one. It’s one operation under one banner.
D.J. Paris 26:15
Gotcha, gotcha. So so if a broker, do you have any broker subscribers, or is it mostly just investors who are who are clicking best customers?
Rosario Terracciano 26:24
It’s all it currently in its current version. It’s all investors. We’ve toyed with because we’ve had brokers approached us and say, hey, well, can I license this and use it? Yeah. Yeah. We’ve toyed with that idea. It’s going to take significant amount of development to build to build a brokerage fees externally. But it’s definitely something that I think could happen in time. Not sure. Sure. And is making predictions. Is there?
D.J. Paris 26:56
Are there? Is there a lot of competitors in this space? I mean, obviously, more on the commercial side, you have. You have, oh, gosh, I’m blanking on costar loot net, who have this this data, they’re not really packaging it, then they’re more on the commercial side. But they’re not packaging it in any way, the same way you are. They have the they have data as well. But I’ve taught what to what I’ve heard, I’m not familiar with any other systems like this. It’s very impressive.
Rosario Terracciano 27:24
There. Yeah, thank you. So my partner used to work across the table from me. So he worked for our institutional client on the buy side. So Jeffrey Kirschner, he’s a financial modeling wizard. And this guy, I mean, I’d put them up against anybody. So when he came on board, so he left the institutional client last May, we connected, he got a peek at the system and said, Oh, my gosh, like, I need to be a part of this. So we partnered last August, and he’s really helped push it to the next level. So the goal is to get into multiple markets and really be the hub for investors to come to. But yeah, there’s nothing out there like it, you know, there, there’s software out there, but the brokerage piece where it’s a one stop shop, where you’re leveraging our track record our experience and, and have the ability to work with our brokers in house that have been trained and in are proven. Doesn’t exist to my knowledge.
D.J. Paris 28:22
Yeah, that’s a really good point. Because you know, the financial model, the algorithms per se, are, is are there. But you also have an impressive history of getting deals closed.
Rosario Terracciano 28:35
Yeah, executions, everything I can, I can send you the, you know, the fanciest tool in the world. But if you never, if you’re never able to get a deal through it, you’re like, great, it’s just a fancy tool, you know.
D.J. Paris 28:48
And I imagine even for your own, you know, for as a brokerage, this just saves you guys so much time when you’re doing deals yourself in just, you know, I imagine that used to just be a grind. And now you’ve you’ve automated it by getting access to MLS data. And so for now, it’s just the Chicagoland area.
Rosario Terracciano 29:07
Correct? Yep. And then our goal God willing is to be in Florida by February. That’s the next jump.
D.J. Paris 29:15
Now that’s that’s fantastic. Well, if if there are investors who are listening who are interested in getting more familiar with click invest, what’s the best way they should, they should do that?
Rosario Terracciano 29:27
They can email me, Rosario, R O S, A R I O, at click invest.com. Or you can go straight to click invest.com and just request the demo. So I’m always doing demos love doing demos. So we we dive in and show the power of the system. And for brokers, so if you have if you’re a listing broker and you’ve got properties, your listing on the market, we’re a great source because we’ve got at any given point So as of today, we’ve got 82 vetted investors that are starving for deals. So if you’ve got any deals that are coming up, you get dual agency if you bring it to us, so you don’t have to, you don’t have to co op the commission at all. Oh, wow. Yeah. So we’re here to make money for everybody. It’s not just about us, it’s how do we add value to, to our colleagues? And how do we add value to the investor community as well?
D.J. Paris 30:25
So and if there are brokers out there who want to learn just more about getting involved in investments, do you have any resources, you recommend that that you think is a good, a good place to get started?
Rosario Terracciano 30:40
I know Eric workman brought this up. I heard him on the show, and it was great. Andrew Holmes, Chicago Ria, is a great source. I’ve, I’ve talked to a lot of different sources out there. And I’ve, I’ve been very skeptical of everyone. Sure, right, just going through it and losing money and being on that side of it. But I’ve had the privilege, the privilege to work with Andrew homes and enroll in their team over there for several months. And they’re, they’re legit. I mean, these are guys that own properties or flipping own rentals. They’re there in a day, every day. And, and, and they’re the proof is in the pudding.
D.J. Paris 31:19
Sure. Yeah, I’d also recommend to the listeners, if you’re not, you know, it’s this kind of a no brainer. But if anyone’s not familiar with bigger pockets, that’s a great place to bigger pockets as well to get, you know, to get acclimated to the community of investors. And there’s a lot of good learning that goes on at bigger pockets.
Rosario Terracciano 31:37
And, and I would say this one other piece, you know, question everybody and question everything. Because nowadays, there’s a lot of snake oil getting whipped around. Sure. And people are spending a ton of dough on all sorts of things. So just, you know, when you go into something, question everybody question everything. And the best experiences hands on experience, for sure. So learn for yourself.
D.J. Paris 32:03
I couldn’t agree more. Well, if if anyone’s interested in learning more about what Rosario does click invest. Obviously, you can reach out to him and visit click invest.com Request a demo and, or as he mentioned his email Rosario at click invest.com. And well, thank you so much for being on the show. We’re sorry, I know you’re incredibly busy. So this was a real thrill for us.
Rosario Terracciano 32:29
Well, thank you for having me. I’m I’m very grateful for the opportunity